Should Apple Drop AT&T?

The new iPhone 3G S is much faster, more elegant and more usable than any other iPhone. With each new version, the high quality of the iPhone stands in stark contrast to the low quality of its exclusive U.S. carrier: AT&T.

I think it's time for Apple to drop AT&T -- or, at least offer iPhone on a second U.S. carrier.

AT&T simply cannot keep up with Apple. The carrier lags the handset maker in technology, customer service and pricing.

The technology lag problem

The shiny new iPhone 3G S offers a long list of great new capabilities. Among these are tethering -- the ability to use the iPhone as a mobile broadband modem for a laptop or netbook -- and multimedia texting, which means you can send text messages with pictures and videos.

While carriers around the world are supporting these new capabilities on Day One, AT&T is unable to do so. The company promises support eventually.

BlackBerrys, Palms and Windows Mobile devices have supported tethering for years. The inability for iPhones to tether has convinced many that iPhone isn't ready for business. Now Apple supports it, but AT&T can't.

Apple has finally introduced iPhone video. And what do people want to do with videos? Text them to their friends! But again, AT&T's failure to support this feature out of the gate means users are still waiting.

AT&T's failure to prepare for the 3G S launch reminds me of their inability to provide adequate signal coverage in small towns like, say, New York City, when the first iPhone launched. When Apple rolled out the iPhone 3G, AT&T's 3G coverage lagged as well.

The iPhone was first with a multi-touch user interface. But on other technologies like 3G, tethering and MMS, the iPhone is actually something of a laggard.

In fact, Apple is behind the curve in many of these same technologies that AT&T is struggling to keep up with.

The Customer Service Disaster

Apple is also in a totally different class from AT&T when it comes to customer service. At the Apple store, you can make an appointment with a "Genius Bar" dude or dudette, and when you have your appointment, you'll usually find yourself talking to someone very knowledgeable about the products.

At the AT&T store, in stark contrast, they act like they've never heard of the iPhone. They're almost always unaware of their own policies and prices, as well as iPhone particulars.

After convincing my wife to upgrade from a Blackberry to an iPhone, I was told at the local AT&T store that she was ineligible to upgrade at any price. They simply refused to sell her an iPhone.

After two hours of trying to get AT&T HQ on the phone, I finally convinced corporate to call the store and set them straight. By then, my wife was so freaked out by the bad customer experience that she decided not to use an iPhone after all. AT&T cost Apple a customer.

AT&T service prices are also too high, especially for international coverage. I know someone personally who signed up for AT&T's 50 MB Global Add-On package. Yes, that's 50 MB per month for $60 in addition to all normal iPhone voice and data charges. Despite dozens of phone calls, the service didn't work for the first month. Then suddenly it worked.

[cob:Pull_Quote]This person surfed the Web a bit, visited Facebook, etc., and ended up quickly surpassing the 50 MB limit, racking up more than $1,500 in data overage charges in the first 36 hours. During this initial period, there was no way to tell how big in megabytes any given Web site was, nor any way to check the charges, as AT&T was unable to post information within that time on "pending charges" page.

After some telephone negotiations, AT&T agreed to look into the possibility that they just might drop the price of data for that first 36 hours down to $500, but only if he agreed to sign up for the $200-per-month plan (that's in addition to all normal iPhone voice and data costs).

Because the person is a college student backpacking on a very limited budget in cheap countries, he's now paying more for his data plan add-on than he is for room and board. His low-budget trip has turned into a high-cost nightmare, thanks to AT&T. That is, if they agree to reduce the charges.

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